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That's Not Covered! Home Insurance Exclusions

By Sanford Ellowitz on March 12th, 2010
Homeowners Insurance

If you're like most people, your home is not just where you live -- it's also your greatest asset. That's why you want to be sure that it is adequately protected with the right type of home insurance. Even if you're not shopping around for a new policy, this may be a good time to review your existing coverage.

Types of Homeowners Policies

There are several different types of home insurance policies. These vary by whether you own a home (HO-1, HO-2, HO-3 or HO-8) or a condo (HO-6), or if you are a renter (HO-4). The various policies provide different levels of coverage, with higher numbered policies covering more perils (aka hazards) than lower numbered policies.

HO-1 and HO-2: Named-Peril Policies

HO-1 is a simple homeowners policy that provides the most basic coverage. It protects your dwelling and property, but only for the 10 perils specifically named in the policy. If a peril is not named in your policy, it is not covered.

The 10 perils covered in an HO1 policy are:

  1. Fire or lightning
  2. Windstorm
  3. Explosion
  4. Smoke
  5. Vandalism
  6. Theft
  7. Volcanic eruption
  8. Hail
  9. Civil commotion or riot
  10. Damage caused by vehicles.

H0-2 is a broad, named-peril policy. This means that your dwelling and personal property are covered for the 10 perils named in the HO-1 policy plus 6 additional named perils. Like an HO-1 policy, if your home is damaged by a peril that is not among one the 16 named, it is not covered.

The 16 named HO-2 perils are:

  1. Fire or lightning
  2. Windstorm or hail
  3. Explosion
  4. Riot or civil commotion
  5. Aircraft
  6. Vehicles
  7. Smoke
  8. Vandalism or malicious mischief
  9. Theft
  10. Volcanic eruption
  11. Falling objects
  12. Weight of ice, snow, or sleet
  13. Accidental discharge or overflow of water or stream
  14. Sudden and accidental tearing apart, cracking, burning, or bulging
  15. Freezing
  16. Sudden and accidental damage from an artificially generated electric current

HO-3: Coverage for Named Perils and Open Perils Coverage

HO3 provides a combination of named-perils and "open perils" coverage. In an HO3 policy, your property has coverage for all of the 16 perils named in an HO-2 policy, plus your dwelling has open perils coverage. This means that your dwelling has coverage for all perils except those hazards that are specifically excluded.

HO-3 Exclusions:

  • Flood
  • Earth movement
  • Ordinance or law (some coverage may be provided in your policy)
  • Water damage (sudden and accidental water damage is automatically included)
  • Power failure
  • Neglect
  • War
  • Nuclear hazard
  • Intentional loss
  • Government action
  • Collapse (some coverage may be provided in your policy)
  • Mold, fungus, or wet Rot (some coverage may be provided in your policy)
  • Birds, vermin, rodents, or insects
  • Wear and tear, or deterioration

If something happens to your home that is not specifically listed as one of the above exclusions, it is covered under an HO-3 policy. However, review your policy so you that you know exactly what is or isn't excluded, as policies may vary by state or insurance company.

Things to Keep in Mind about Homeowners Insurance

Flood damage is excluded under standard homeowners and renter's insurance policies. However, flood coverage is available through the National Flood Insurance Program (NFIP).

Earthquake damaged is not covered by a standard home insurance, but you can buy earthquake insurance from a private insurance company.

No matter what type of policy you buy, make sure your coverage limits are high enough to properly reimbursed you for damage to your dwelling. If you haven't upgraded your policy recently, you may find that you don't have enough coverage to repair or replace your home or your possessions. Remember, the right time to know what your policy covers is before your home suffers damage.

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